Ah, content providers and their stringent pricing and sales schemes. On the same note, NBC signed up knowing what the deal was, and now they want to come along and change it like as if they have a stake in the company?
Basically what is happening is NBC is apparently wanting to change the pricing scheme for its shows. As if that wasn’t enough, they also want the ability to bundle videos, I don’t know if they would be bundling multiple videos, test pilots, or advertisements, but surely there has to be a reason why Apple is so dead set against it since they already bundle songs in albums.
Anyways, Apple and NBC have until December, when their current contract expires, to work things out. So when the fall season of your favorite NBC shows starts, if you are dependent on iTunes for them, you might want to make sure you know when they actually air before December.
Rumor – Disagreements with Apple could lead to NBC shows being pulled from iTunes [via SlashGear]
I think I’m going to stop reading My iTablet.
Whenever there’s a rumor floating around the internet,
you go and post it as if it were a fact (example: Apple iPod shuffle PRODUCT (RED) to drop September 5th).
And then whenever there’s something that is a fact,
such as this article which was confirmed to be true by Apple themselves on their own web page as a press release,
you still go and post it as a “rumor”.
I’ve changed my mind.
I don’t think I’m going stop reading My iTablet,
I know I’m going to stop reading My iTablet.
NBC-U has played their hand … they’re betting large on Hulu.com an “in development” (Beta in Oct) site that will offer some downloads but primarily ad-supported streaming videos. NBC-U is betting that streaming video is the future and that downloads will go the way of 8-track tapes.
That may be true some day. But NBC was betting that they’d soften Apple up with their Hulu leverage (better pricing and packaging deals) and they’d have iTunes cashflow for months if not years to come. Not so fast! Apple just called NBC-U’s bluff … Don’t think NBC-U expected Apple to act preemptively. I’m sure NBC-U thought their “notice not to renew” would go down in the same fashion as the Universal Music “no deal” … essentially an agreement whereby either party can take their toys and go home at will. Nope! This one is not going to be a “living in sin” arrangement. NBC-U has a mistress (her name is Hulu) and Apple just served divorce papers. There’s still room for reconciliation but … someone needs to be humbled here. I think Apple has hand in this relationship.
IMO NBC-U’s (in Partnership with Rupert Murdoch) Hulu gambit has several major risks. The bet is that users will flock to Hulu as the streaming videos will be “free.” And they’ll be tolerant of the commercial ads (ala standard TV experience). Hulu users may also have to pay a monthly subscription fee to access “free” streaming content. This is just conjecture on my part as no details have been announced.
So what are the primary risks for Hulu (NBC-U and NewsCorp)?
• NBC-U walks away from $60 million in annual revenue (98% pure profit) with absolutely no guarantee that this revenue stream will be replaced via the Hulu.com gambit.
• Future Hulu users find the subscription fee isn’t worth the access to “free” videos.
• Hulu users turn away from the site when they find that they have to sit through a gauntlet of disruptive ads.
• Piracy of NBC-U shows accelerates as users find it is just as easy to find NBC-U content on truly free P2P sites .. that experience a sudden surge in demand for NBC-U shows … Gee, wonder why? P2P download revenue to NBC-U = $0.00.
• NBC-U’s distribution partners jump ship like drowning rats when the see that this venture is only causing an acceleration of content piracy.
• Advertisers squeeze Hulu and rates drop as viewership proves to be not as “advertised” in the Hulu venture prospectus.
I hadn’t heard the part about “bundling” but surely it refers to something other than albums. We already have albums for shows. We call them seasons.
I have to agree with Dan’s prognosticaton: NBC figured it was safe to try killing the goose to get at those golden eggs because of their in house fallback. Would’ve been smarter to wait to see if Hulu would fly first. But when did you last see a media company do anything smart in regard to digital distribution?
NBC-U responds to Apple
“We never asked to double the wholesale price for our TV shows.” (Translation: well, okay … so we pushed hard for a $4.99 price-point … But come on guys, everyone knows that during contracting you toss out a high number and then the real negotiations begin. We didn’t think Apple would take us seriously. Geez! Guess Apple heard that we’re telling every media distributor in the world to ditch iTunes in favor of our new Hulu.com venture. Maybe we played our hand too soon? Our inbox is spilling over with “wishing you well” comments from iTunes customers (not). Damn you Apple! Damn you Digg!)
The following is a reformatted version of a statement from Cory Shields, EVP Communications of NBC Universal, regarding its iTunes contract -
“We are also disappointed in not being able to successfully negotiate a new iTunes agreement with Apple. We’re hopeful that we can reach a resolution before the existing contract expires. However, we felt it important to set the record straight.
We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.
It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying.
In addition, we asked Apple to take concrete steps to protect content from piracy, since it is estimated that the typical iPod contains a significant amount of illegally downloaded material.
Furthermore, we want consumers to know that all our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December. Our content is also available on NBC.com, Amazon.com, and the soon-to-launch hulu.com.”
NBC sucks! What’s with all the excessive greed these days?
Did NBC ever stop to think that maybe we don’t want a bundle of crap? If I want a specific show I don’t want to pay for your crappy one also, just because it’s in a bundle.
Ever notice movie bundles always include one good one and one turd!
Sounds a bit like Apple’s tactics with mobile phone companies, only this time the other way around. I’m an Apple fan, but frankly, most of this arguing is centred around trying to make more money from something than is really fair on the consumer (ie greed).
We are all prepared to pay for content and services but don’t try to rip us off… It’s getting a bit boring.
NBC-U is reeling under a PR nightmare. Apple’s Press Release (response to NBC-U non-renewal on iTunes) just passed 4,800 diggs with many hundreds of comments running 9 to 1 negative on NBC-U. NBC-U’s subsequent counter-response claims “we never asked to double the wholesale price of our TV shows”
Just for fun, here is a bit of role-play (conjecture) re the recent NBC-U/Apple iTunes contract negotiations:
NBC-U: Here’s the deal Apple, we want to bundle show offerings on iTunes and bump the price-point to $4.99
Apple: But you’re taking hit shows and packaging them with turds. We understand that you’d like more revenue and this is one way to twist the consumer’s arm … but it’s not pro-consumer and will only cause NBC-U’s share of iTunes revenue to drop. Dramatically we might add.
NBC-U: Our pricing model shows this will not hurt our iTunes share. Quite the contrary.
Apple: Who’d you hire to do your modeling?
NBC-U: The Enderle Group and Forrester Research.
Apple: (collective roll of the eyes) Oh I see. Did Enderle and Forrester also consult on your new Hulu.com venture?
NBC-U: Yes … But that’s none of your business.
Apple: Okie dokie … I think we’re getting a better picture now.
Here’s the deal. We’ll offer your proposed bundles … any combo you’d like for that matter … and at any price point … $4.99 or $5.99 or $59.99 for all we care … BUT regardless of any bundled offering you propose, we are adamant that we give consumers a true choice … So iTunes will keep the individual shows at a stand-alone $1.99 per episode. That way the consumer can compare your bundled offering and decided whether they want the package for $4.99 or just the one show they are interested in at $1.99 … Okay, sounds fair and reasonable … Doesn’t it? We’ll let the consumer decide.
NBC-U: Sorry Apple, we don’t see it that way. Our packages are designed to give the consumer an excellent value of content at a discounted … Blah, blah, blah … cough … BS… spin… and more BS. So “No” we will decide how shows are packaged and that means that some shows will NOT be available unless the consumer buys the full package. Hey, you (iTunes) already do this with selected songs on albums. “This song is available only with purchase of the album.”
Apple: Not the same thing … The songs were all part of an original album and by the original artists. You are talking about packing completely different shows tied by some sort of nebulous theme.
NBC-U: Look, you have our position on this matter. You’ve seen our proposed packaging and pricing … were not asking for permission … In fact, we are hereby giving you the requisite 90-day non-renewal notice. As you know we have plans for streaming videos through our own Hulu.com website … we think it’s going to be a compelling offering and so do our distribution partners. Again Apple, we are not asking for your permission.
Apple: You’re gonna get triple-B buzzed.
NBC-U: What’s “triple-B”
Apple: BitTorrent. Boom. Buh-Bye!
[quote comment="7969"]I think I’m going to stop reading My iTablet.
Whenever there’s a rumor floating around the internet,
you go and post it as if it were a fact (example: Apple iPod shuffle PRODUCT (RED) to drop September 5th).
And then whenever there’s something that is a fact,
such as this article which was confirmed to be true by Apple themselves on their own web page as a press release,
you still go and post it as a “rumor”.
I’ve changed my mind.
I don’t think I’m going stop reading My iTablet,
I know I’m going to stop reading My iTablet.[/quote]
Unfortunately what we have here is a disagreement on the term “rumor.” This story of NBC sourced my article on SlashGear.com which I also labeled a rumor. While Apple has officially stated that NBC won’t have their new lineup on iTunes, NBC (at the time of writing) had officially stated that they would have their shows available. So we have two conflicting “official” statements, and no cold hard fact. Unless I have a hard fact, it’s my duty to make people aware of that by using the label of “rumor.”
Unfortunately in recent times there have been stories on other sites that didn’t have all of the complete facts that caused uproars for not labeling them rumors. Such stories made stock prices fall for companies just for not being labeled properly. I just want to make sure that none of my stories are taken for cold hard fact when it is not so. I’m sorry if you don’t see this as the correct way to do things, but we have to be cautious in our writing at times.